Ministers should end child poverty instead of spending more on education if they want to raise school standards, according to a new report published today.

Tony Blair's slogan "education, education, education" is mistaken, says Peter Robinson, author of the study from the Centre for Economic Performance, an independent research unit at the London School of Economics.

This direct challenge to the Government's belief that better education leads to a stronger economy comes the day after the Prime Minister, Tony Blair, underlined the Government's pledge to raise standards in schools with an education summit.

The Downing Street event brought ministers and civil servants together with 40 headteachers and others from the education world to discuss themes which included boosting school leadership, stretching children of average ability, improving teaching quality and tackling underperformance.

The report argues against these approaches. "A serious programme to tackle child poverty might do far more for boosting attainment in literacy and numeracy than any modest interventions in schooling."

A study of comparative performance in international maths surveys over the last 35 years shows that the scores bear very little relationship to economic performance. While the growing Asian economies do well, so do the Slovak Republic and Bulgaria.

"The two most successful small Asian economies, Singapore and Hong Kong, had in 1985 adult illiteracy rates of 14 and 12 per cent." The rate in advanced industrial economies is less than 1 per cent.

The report followed people born in the same week in 1958 and 1970 and suggests that class size, homework, setting and streaming and teaching methods have no impact on literacy and numeracy, but social class does.

The only impact schools can make is shown in the finding that working- class children learn more if they are educated with middle-class children. Mr Robinson said the findings suggested that children did best in socially mixed comprehensives.

The report points out that, though the economy does not benefit from higher literacy and numeracy standards, individuals do. Yet the Government's present policy of targets ensures that schools have little incentive to concentrate on the bottom 10 or 15 per cent of pupils.

At GCSE that meant that the least able were neglected because the Government target was five A-C grades (the three top grades).

In primary schools, the target was for all pupils to reach Level 4 in maths and English, suggesting that teachers should concentrate on those who are just below average. Level 3 for all would be a better target because it would compel teachers to pay more attention to the least able, Mr Robinson said.

He added: "The Government says that at the moment we have an education system that benefits the few and not the majority. It is the other way round. The system benefits the majority but not the few at the bottom."